Market Overview

Power Electronics (PE) refers to devices that convert electrical energy from one form to another. The global power electronics market has been growing at a moderate rate. Power electronics is used in various industries such as automotive, power & energy, ICT, consumer electronics, and aerospace & defense; however, among these industries, the dominating share is occupied by consumer electronics industry. Power electronics devices are mainly used in products such as laptops, smart phones, televisions, computers, LCDs, and DVDs. The rapid adoption of new technology and the need to provide stable power supply are the major drivers for the adoption of power electronics in the consumer electronics sector.

GLOBAL POWER ELECTRONICS MARKET BY VOLTAGE $M (2012–2022)

Market Dynamics

The global power electronics market is likely to grow from $12.9 billion in 2015 to $20.0 billion by 2022. The technological advancements, increasing number of applications for power electronics and growth in adoption in renewable energy segment are the factors driving the growth of the global power electronics market.

Power electronics has changed rapidly during the last thirty years and the number of applications has been increasing, mainly due to developments of the semiconductor devices and the microprocessor technology. Today, it is accepted globally that a real breakthrough in the power electronics industry is expected to come from the development and use of WBG semiconductor devices. The two major WBG materials with the potential to allow significant advances in power electronics are silicon carbide (SiC) and gallium nitride (GaN). GaN is expected to be the major WBG semiconductor for the replacement of silicon-based applications requiring device ratings less than 600 volts, but its impact is expected to be predominant for radio frequency (RF) and power supply applications.

The adoption of power electronics in the renewable energy sector has been rejuvenating the market. The increasing demand for higher power density in electronics and high penetration of power electronics devices in utility applications are the major drivers for the global power electronics market.

Trends

The key trend observed in the global power electronics market is high investment in research and development, increasing application of power electronics across various sectors and growing need for energy conservation.

In recent years, the power electronics companies have been increasingly spending a considerable amount of their revenue on R&D to stay ahead of their competitors and gain a larger market share. For power electronics device manufacturers, R&D is crucial because superior innovations can provide competitive advantages over other players. In addition, a key buying criterion for customers is efficiency, which can be achieved and improved through R&D. Owing to these factors, the trend of high R&D expenditures in the global power electronics market is expected to continue during the forecast period.

The applications of power electronic devices are expanding across various sectors, especially in the automobile industry. The evolution of electric vehicles (EVs) and hybrid electric vehicles (HEVs) is driving the demand for power electronic devices in the automotive industry. In addition, the increase in infotainment applications in automobiles is driving the demand for power electronic devices with high power density. The power electronics devices are increasingly being used in the defense and renewable energy sectors. These devices offer conservation and a reliable source of energy to fill the military's communication and weapon needs. Other sectors where the applications of power electronic devices are increasing, include consumer electronics, healthcare, manufacturing, and telecom.

The vendors in the market offer power electronic devices for use in a range of applications. The key vendors in the power electronics market are focusing on energy conservation in order to remain competitive. Several vendors are working to increase power density, thereby affecting the cost of power electronic devices and associated applications. The cost of power electronics devices is likely to increase during the forecast period. The increase in power density results in an increase in the power efficiency of devices, thus helping end-users conserve energy over a long period. The depletion and rising cost of fossil fuels makes energy conservation a requirement and a trend that could trigger market growth over the next few years.

Growth Drivers

The factors driving the growth of the power electronics market include the growing requirement for higher power density, and increased penetration of power electronic devices in utility applications.

The power electronic devices ensure effective delivery of power, providing high reliability, security and flexibility to the power system. Power electronic devices play a key role in the conversion of the existing electrical grids to next-generation networks. At present, approximately 30% of all power generation is carried out using power electronic devices, either at the point of power generation or at the final consumption of electricity. It is expected that by 2030, up to 80% of the electricity produced will use power electronic devices.

Competitive Landscape

The overall intensity of rivalry in the power electronics market is high due to the existence of large number of players in the market. The average growth rate of the industry creates a moderate degree of rivalry in the power electronics market. The intensity of rivalry is also high because of low differentiation among the products. The low switching cost further elevates the level of competition in the power electronics market. Some of the key players in the global market include NXP Semiconductors N.V., Infineon Technologies AG, STMicroelectronics N.V., ON Semiconductor, Vishay Intertechnology Inc., Microsemi Corporation, Toshiba Corporation, Texas Instrumentation Inc., and ABB Ltd.

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